A GST invoice is more than just a bill. It's a legal document that determines whether your buyer can claim Input Tax Credit — and whether you're compliant with GST law.
I've seen businesses lose lakhs in ITC claims simply because their invoice was missing one or two mandatory fields. In this guide, I'll walk you through exactly what a compliant GST invoice needs, what common mistakes to avoid, and how to generate one for free.
When Must You Issue a GST Invoice?
You must issue a GST invoice when:
- You're a registered GST supplier making a taxable supply
- The transaction value exceeds ₹200 (below this, you can issue a consolidated invoice at end of day)
- You're making a supply to another registered business (B2B)
For B2C supplies above ₹2,50,000 interstate, a proper tax invoice is mandatory.
Mandatory Fields in a GST Invoice
The CGST Act Section 31 specifies what every tax invoice must contain:
1. Supplier Details
- Name of the supplier
- Address of the supplier
- GSTIN of the supplier
2. Invoice Details
- Consecutive serial number (can include letters, numbers, special characters — max 16 characters)
- Date of issue
3. Recipient Details (B2B)
- Name of the recipient
- Address of the recipient
- GSTIN or UIN of the recipient (mandatory for B2B)
- State name and state code
4. Item Details
- Description of goods or services
- HSN code (mandatory based on turnover — see table below)
- SAC code for services
- Quantity and unit of measure
- Total value of supply
- Taxable value after discounts
5. Tax Details
- Applicable GST rate (%)
- CGST amount (for intrastate)
- SGST/UTGST amount (for intrastate)
- IGST amount (for interstate)
- Total tax amount
6. Other Mandatory Fields
- Place of supply (state)
- Whether the tax is payable on reverse charge
- Signature or digital signature of supplier or authorized representative
HSN Code Requirement Based on Turnover
| Annual Turnover | HSN Digits Required | |----------------|---------------------| | Up to ₹5 crore | 4-digit HSN code | | Above ₹5 crore | 6-digit HSN code | | Exporters | 8-digit HSN code |
Not sure which HSN code to use? Use our HSN Code Finder.
Invoice Serial Number Rules
This catches a lot of businesses off guard. The GST invoice number must be:
- Unique for each financial year (resets on April 1)
- Consecutive — you can't skip numbers
- Maximum 16 characters
- Can include letters, numbers, and
/or-
Valid formats: INV-2025-001, GST/2025-26/001, 2526001
Common GST Invoice Mistakes
Mistake 1: Missing GSTIN of buyer in B2B invoices Your buyer cannot claim ITC without your GSTIN and their GSTIN on the invoice.
Mistake 2: Wrong place of supply For services, place of supply determines CGST+SGST vs IGST. Getting this wrong means wrong tax deposited — which has to be corrected with a credit note.
Mistake 3: Incorrect HSN code HSN code determines the tax rate. A wrong code means a wrong rate, which means non-compliance.
Mistake 4: Not issuing invoice within time limit
- Goods: Invoice must be issued before or at time of removal
- Services: Within 30 days of supply (45 days for banking and financial services)
Bill of Supply vs Tax Invoice
Not all registered businesses issue tax invoices. If you're under the composition scheme, you issue a Bill of Supply — which looks similar but:
- Does NOT show tax amount separately
- Cannot be used by buyer for ITC
- Must state "Composition Taxable Person — Not Eligible to Collect Tax on Supplies"
Generate a Compliant GST Invoice Free
Creating an invoice manually for every transaction is error-prone. Our GST Invoice Generator automatically:
- Calculates CGST/SGST vs IGST based on states
- Adds all mandatory fields
- Generates consecutive invoice numbers
- Creates professional PDF ready to share
Free plan includes 5 invoices per month — enough for most freelancers and small vendors.
Conclusion
A GST invoice is your legal protection and your buyer's gateway to ITC. Missing even one mandatory field can result in ITC rejection for your buyer and scrutiny for you.
Use our free invoice generator to ensure every invoice you create is compliant — no accounting knowledge needed.
